In order to be successful in a market economy, entrepreneurs must

You borrow $10,000 from a bank for one year at a nominal interest rate of 5%. If inflation over the year is 2%, what is the real interest rate you are paying?

A) 2% B) 2.5% C) 3% D) 5%

The multiplier measures the

A) number of steps it takes to move from one equilibrium to another. B) rise in saving resulting from a rise in income. C) marginal propensity to invest. D) rise in equilibrium GDP resulting from a one dollar rise in planned autonomous expenditures.